The rollout of several stimulus measures by the US government to help the economy recover following the fallout of the Covid-19 pandemic, including various monetary and fiscal policies, had caused inflation expectations to rise in the middle of 2020. These were further bolstered following news that US President Joe Biden had signed a $1.9 trillion coronavirus relief packaged on March 11.
Market sources said the rising inflation expectations were an indication of investor confidence in the economic recovery, leading to bullish markets for commodities such as copper and iron ore.
For instance, the daily official cash price for copper on London Metal Exchange
reached a seven-year high of $9,614.50 per tonne on February 25. This compares with $7,918.50 per tonne on January 4, the first trading day of 2021.
Meanwhile, Fastmarkets’ iron ore index for 62% Fe fines, cfr Qingdao reached an a nine-year high...